"Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."

"Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."

"There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."

"For Years, the Investment Industry Has Tried to Scare Clients Into Staying Fully Invested in the Stock Market at All Times, No Matter How High Stocks Go. It's Hooey. They're Leaving Out More Than Half the Story."

"There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."

"There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."

"I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."

"Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."

"Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."

"The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."

"You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."

“What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”

"You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."

"Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."

"There Is Nothing More Doubtful of Success Than a New System. The Initiator Has the Enmity of All Who Profit By Preservation of the Old Institution and Merely Lukewarm Defenders in Those Who Gain By the New One."

"Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."

"I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”

"Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."

"Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."

"I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."

"The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."

"I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."

"As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."

"This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."

"The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."

"It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."

"Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."

"A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."

"How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."

"The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."

"It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."

"If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."

"New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."

"I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."

"It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"

"Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."

"The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."

"There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."

"A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."

"I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."

"I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."

"It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."

"Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."

"I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."

"Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."

"Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."

"Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"

"Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."

"If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."

"Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."

"The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."

"I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."

"I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."

"I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."

"Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."

"Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"

"I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!

"Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."

"I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."

"I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."

"Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."

"As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."

"Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."

"I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"

"You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."

"Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."

"I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."

"I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."

"Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."

The Author of the Bogleheads Wiki Statement on SWRs Speaks Out

A fellow going by the name “SWR Lover” has posted a comment to Tuesday’s blog entry on the Bogleheads wiki statement on safe withdrawal rates (SWRs), saying that he is the author. We of course do not know this for certain to be so. I find it believable. The group that controls what goes into the Bogleheads wiki has strong connections with John Greaney and with the abusive posters who congregate at Goon Central to organize their work destroying Retire Early boards and Indexing boards. One of the regulars there is “Drip Guy,” and the wording of SWR Lover’s post suggests that he could well be “Drip Guy” under another name. Certainly the reasoning employed by SWR Lover is the reasoning that I witnessed often being put forward by Mel Lindauer (co-author of The Bogleheads Guide to Investing) and his “defenders” during his campaign to block honest posting on SWRs at the Vanguard Diehards board. If SWR Lover is not in fact the author of the flawed wiki statement, he is certainly guilty of possessing the same mindset as the author of those hard-headed and hard-hearted words.

First, a word on why you should read what follows. The Old School SWR findings have over the years been cited in tens of thousands if not hundreds of thousands of newspaper articles on retirement planning. It is rare to hear retirement advice today that was not influenced in some way by these studies. That means that you have been influenced by them. We all take in what we hear thousands of times and all of us have been influenced in some way by these claims. If the Old School SWR studies got the numbers wrong (and they did), we are all at risk of suffering busted retirements somewhere along the line as a result. And the false reasoning that led to the errors in the Old School studies led to errors in the investing advice you have heard and accepted as true in many other areas. SWRs matter. It is critical that they be reported accurately. That’s why I often spend time analyzing carefully statements of the sort we saw put forward by SWR Lover last night. His errors are our errors. When we come to understand why SWR Lover has gotten it all wrong, we come to learn where the rest of us have gotten it all wrong too.

Here is what SWR Lover said in his comment to the earlier blog entry:

“Rob,

“I personally wrote the initial article for the Wiki section on SWR. I also purposely included the statement you see there now:

“Original Author, in Wiki: “…one should always be sure to be clear whether the use is in reference to past or projected SWRs, so that unnecessary argument can be prevented.”

“I did that to illustrate there is no need to misunderstand history versus future. Most folks handle that concept quite nicely and naturally without needing to see such a clause, but I thought it added a nice closed loop to that potential argument(!). It certainly does not mean what you ascribe to it:

“RB on his blog: “This statement implicitly (but not explicitly, to be sure) acknowledges that [“old school studies”.. are not [correct].”

“It does not mean that in any way, shape or form. I know what it means, because I wrote it. My intent was to make sure the record is plain as can be, and I think it actually is. (Well, perhaps except for one person. We do what we can, but sometimes there are limits…).”

These are word games. People use SWR studies to plan their retirements. It is important that people planning retirements have access to correct numbers. Otherwise, they are likely to suffer busted retirements. The historical stock-return data shows that the biggest factor affecting the safety of a retirement is the valuation level for stocks that applies on the day the retirement begins. The Old School studies contain no adjustment for this factor. Thus, the Old School studies get the numbers wrong. At times when valuations are extremely high (as they have been for a good time now), they get the numbers wildly wrong. Those are the realities.

The key phrase in SWR Lover’s comment is: “Most folks handle that concept quite nicely and naturally without needing to see such a clause.” There is a sense in which that statement is 100 percent false and there is a sense in which that statement is largely true.

The “concept” he is referring to is the word game. Do most folks view the Old School studies as trickery? Do they know right off the bat that they are exercises in word gaming? Do they get it that we have about as much chance of learning the SWR by using the methodology employed in the Old School studies as we have of getting the SWR right by picking numbers out of a hat?

They do not. There were hundreds of SWR threads that appeared at the Motley Fool board in the days before I first reported what I knew about SWRs (that was on the morning of May 13, 2002). In none of those threads did anyone ever say that he knew that the Old School methodology was just a sick joke and that the numbers were wildly off and that these numbers were in no circumstances to be used to plan a retirement taking place on Planet Earth (William Bernstein has said that anyone giving thought to using one of the Old School studies to plan a retirement would be well-advised to “FuhGedDaBouDit!”). Every member of that discussion-board community thought that the Old School studies were legitimate (even I thought at the time that the studies were the product of honest effort). Those threads remain available today. What I am saying here can be checked. People have planned retirements by making reference to the Old School studies.

There is a sense, though, in which what SWR Lover is saying here really is so. People thought at one time that the methodology used in the Old School studies was analytically valid. Now they know that it is not. But a good number of the people who have learned as a result of our discussions that the Old School studies get the numbers wildly wrong still use the Old School studies to plan their retirements! This also can be verified by looking at the Post Archives of The Great Safe Withdrawal Rate Debate. This also can be checked.

So we have learned two important things. One, we have learned that our thinking on what it takes to plan a retirement effectively is hopelessly confused. We got it all wrong, and we need to go back to the beginning and start again (that’s what The Retirement Risk Evaluator, the world’s first New School SWR calculator, is all about). Two, we have learned that discovering that a methodology gets the numbers wrong does not necessarily hit investors where they live. It might be that people want accurate numbers when analyzing things in other fields (that certainly has always been my experience!). When it comes to investing, though, an entirely different set of rules applies. In the investing field, people love to be deceived. In the investing field, people applaud inaccuracies. In the investing field, people react with shock and anger and hostility to the idea that a false number might be corrected. Stock investing generally does not work according to the rules of reason.

The latter finding is the more important one, in my assessment. It is of critical importance that the Old School studies be corrected, to be sure. But it is of even greater importance that we come to a deeper understanding of why it is that people want to be deceived in the investing advice they read. That’s more important because doing the work it takes to get the numbers right is a waste of time if people are not responsive to what we come up with.

I say above that in earlier days I believed that the Old School studies were the product of honest effort, suggesting that I do not believe that to be the case today. Am I saying that I think that all the authors and promoters of the Old School studies are engaged in fraud? Yes and no. It is fraud to advise people to use numbers you know to be wrong to plan their retirements (and the errors in these studies are so basic that it is more than a little hard to imagine that I am the first person who has noticed them). But it is a very strange and special kind of fraud we are dealing with. Many of the people advocating that others use the Old School studies to plan their retirements are using them themselves to plan their own retirements. This too can be verified by making reference to the Post Archives of our discussions. So this is an act of fraud in which the person engaging in the fraud is himself a victim of the fraud. Holy moly!

Self-deception is the primary problem here. The deception of others is of course a big problem too. But, if we want to help the people whose retirements are at risk, we need to be practical in our approach. And the practical reality is that we need to deal with the self-deception matter to get to first base. When the people telling lies about SWRs (word games are essentially lies, are they not?) realize that they are destroying themselves by using bad numbers to plan their own retirements, they will stop urging others to use bad numbers to plan their retirements. Does that not make sense?

I of course believe that we should continue to do what we can to get the word out about the false SWR claims advanced in the Old School studies. There are hundreds of community members who have responded with great enthusiasm to our findings, showing that the level of self-deception practiced by stock investors varies greatly; some are capable of seeing that it is a bad idea to use wildly wrong numbers when deciding when to hand in a resignation to an employer. Many others are not capable of seeing this, however. Those many others include (not entirely, but to some extent) big names like John Bogle, William Bernstein and Scott Burns. So our most urgent task today is to come to a better understanding of why even powerful minds feel such a strong draw to self-deception when forming ideas about how to invest. That’s a big story in its own right, bigger than the story about the Old School studies getting the numbers wrong, in my estimation.

I referred to SWR Lover’s comments as “repulsive” in my response in the comments section for the earlier blog entry. The reason why I find the word games repulsive is that word games feed right into this self-deception disease that we all seem to suffer from in the area of investing. We very, very, very much want to believe that things that cannot possibly be so about stock investing really are so. I see it as the most important work project of my lifetime to come to a full understanding of why it is that stock investors destroy themselves in this way over and over again (this is the fourth time in history in which valuations have risen to what they are today — the first three trips ended in bone-crushing losses to all who invested heavily in stocks despite what their common sense told them about the risks of doing so at these sorts of price levels). Those who are engaging in word games are doing the opposite of what I am seeking to do. I am trying to make things more clear to people, they are trying to make things less clear. It is in this sense that I view the use of word games in this area as “repulsive.”

I do not view SWR Guy repulsive as a person. I am grateful that he let us know a little bit of what was going on in his mind when he wrote the gibberish that now serves as the Bogleheads wiki statement on SWRs. I contest the ideas put forward by SWR Guy to the strongest extent imaginable. He and I are coming at this from entirely different places. I hope that our personal interactions can be warm ones and civil ones and friendly ones and helpful ones. That’s because I want them to be learning ones. SWR Lover is not just destroying others with his word games. He is destroying himself at the same time. I think if benefits all aspiring early retirees for us to learn what it is that makes it seem in his eyes that that is an appealing thing to do.

The historical stock-return data shows that the biggest factor affecting the safety of a retirement is the valuation level for stocks that applies on the day the retirement begins. The Old School studies contain no adjustment for this factor. Thus, the Old School studies get the numbers wrong. At times when valuations are extremely high (as they have been for a good time now), they get the numbers wildly wrong. Those are the realities.

have you considered the possibility that the author of … has deceived himself?

I try to keep that possibility in mind at all times, A Retiree Looks In.

I’m not the best person for the job, though, am I? If I am deceiving myself, how likely is it that I am going to ring the bell on myself?

I need to trust that you or one of the other community members skeptical of my claims will call it to my attention when they see an act of self-deception on my part. Having others review your stuff and comment on it is one of the best ways I know of keeping that human inclination to self-deception in check.

So — thanks, man!

I am saying that in a light-hearted way. But I don’t mean it entirely as a joke. It’s a joke with an important truth at the core.

If you believe the sentence to be literally and absolutely true, you deceive yourself.

Perhaps.

Still, I’ll tell you and any others listening in where I am coming from so that you have a bit more on which to base a judgment, A Retiree.

Please take a look at The Retirement Risk Evaluator (see tab at the left side of this page). The default results show that the SWR varies from 2 percent to 9 percent, depending on the valuation level that applies on the day the retirement begins. That’s a huge spread. Say that you need to take out $40,000 per year to cover your expenses. At a time of high valuations, you need $2,000,000 to support a safe retirement. At a time of low valuations, $500,000 would more than cover it. That’s a difference of $1.5 million attributable to this one factor. It’s hard for me to see how there is any other one factor so important as this one.

In particular circumstances, sure, there are other factors that play a big role. So, when you say that it is not “absolutely” true, perhaps that’s right. If “absolutely true” means that there can be no case in which other factors are most important, I can go along with that. But is there any other factor that plays such a big role in a general sense? If there is, I am not able to say what it is.

I believe that it is fair to say that valuations is the single biggest factor affecting the safety of a retirement. I am not able to come up with any reasonable case for leaving that factor out of the analysis altogether (as the Old School studies do). But if there are people who say that there are other factors that play a dominant role in particular circumstances, I have no problem with that. When I say that the valuation level is the single most important factor, I mean in a general sense.

I think we could help a whole big bunch of people retire many years sooner by letting them see how huge a role is played by this one too-often-ignored factor..

Drip Guy and SWR Lover submitted comments to this thread last night that do not meet the standards that apply here. The comments were also posted to the Goon Central board. So, if there are community members who feel a desire to read these comments, they can be read there. There is a link to the Goon Central board in the Blogroll (please look to the left side of the screen, below the Categories section and above the Archives section).

Well, then let’s try it again, Rob. If this is violative of some standard you have, please point out the rule being broken. I would think that you, of all people, would be sensitive to making sure you are clear about why you would ban honest posting.

Rob (and JWR),

You recently authored a long blog article and participated extensively in the commentary. Between the article and comments by you, it totaled about three thousand words. The topic? A single clause, within a single section, of a single page, of a single area, of a single Wiki, found on Bogleheads.

The clause was to placed in the Wiki to avoid potential misunderstanding regarding distinguishing PAST information and FUTURE forecasting. The clause should have been unnecessary, but given your multi-year crusade about a supposed error that no one else seems to be able to see, it was an attempt to draw a sharp distinction to a rather obvious point, that nonetheless, seems to have escaped both you and JWR.

In detail; past information was analyzed extensively in Trinity and other studies to determine what withdrawal rates would have been ‘safe’; with ‘safe’ defined within the context of the study. Despite years of your lone protestation that some sort of error exists in this study, you have failed to ever provide a specific citation that specifies such “error.” Links to the various studies, including Trinity, were provided in the Wiki for the express purpose of allowing detailed commentary traceable back to the source document. I invite you, even at this extraordinarily late date, to please be specific with your claim of error, or of JWR’s claim that some sort of analytical or statistical insufficiency exists.

I have no ax to grind — I did not author any of the work referenced on the Wiki. I merely seek the truth. I give you my personal oath: If one of the studies referenced on the Boglehead Wiki can be shown to be in error, I will extend all efforts to have that error pointed out, and corrected.

I warn you in advance, though, that the reason I invested the effort into a Wiki and not into a personal blog, is that Wiki’s are uniquely a community construct, where the personality and leanings of any individual author are neccessarily subordinated to the authority of the greater community, who can refine, overwrite, extend, correct, and otherwise remove any vestiges of ego that may be the driver for other types of writing. In other words, the Wiki is no place to look for personal acknowledgment, but rather, a community whiteboard, where ideally ‘many hands make light work’ of finding the truth.

If the clause is so utterly wrong, so objectionable, so much a ‘word game,’ then other contributors (or since this is a moderated Wiki, the edit staff) could easily offer up a better clause, or remove the offending clause, or revamp the section altogether.

It is my strongest position that any links or references on that Wiki should be vetted positively by a recognized authority in the field of finance, such as FPA Journal, etc.

Even Wikis that cover light topics such as celebrity or hobbies still follow the standard that consensus and factual support must be obtained –people who hold truly solitary positions, that are rejected by the community, are still free to express themselves to their heart’s content on their own blogs or writings, but there is no expectation that they will be represented on the Wiki. Einstein or Galileo would likely have been rejected by a Wiki, had one existed in their day. Thank goodness through the strength of their solitary writings, they were able to express their views so clearly and with such support, that they eventually did make their way to broad adoption. I suggest anyone who thinks they are the next great thing NOT fight to get recognized by a Wiki, but instead focus on sharpening their written arguments, making their case with support, including irrefutable logic and math, and then set that out for the world to see. Einstein’s short paper on Brownian motion is an example of such tight, irrefutable, empirically reproducible fact, that it simply had to be adopted, implications and all, because there was no other adequate response.

A Wiki is a tool to collect and disseminate relevant accurate information to a specific topic. It is not an ideal place to launch a ‘movement.’

given your multi-year crusade about a supposed error that no one else seems to be able to see

Many community members have expressed great interest in our SWR findings and in all of the valuation-related findings that we have been able to generate in recent years as a result of the SWR work we did as a community a good number of years back. Many community members have expressed a desire that honest posting on SWRs and other valuation-related topics be permitted at all of the Retire Early and Indexing boards. It’s not just me who sees the benefit of reporting the SWR accurately and it is not just me who sees the benefit of permitting honest posting.

I will continue to report accurately what the historical data says about SWRs and I will continue to do what I can to learn from the work we have done and to report on what we learn for the benefit of both old and new community members.

I am grateful to you for rewriting the comment so that it could be posted here.

“The clause was to placed in the Wiki to avoid potential misunderstanding regarding distinguishing PAST information and FUTURE forecasting. The clause should have been unnecessary, but given your multi-year crusade about a supposed error that no one else seems to be able to see, it was an attempt to draw a sharp distinction to a rather obvious point, that nonetheless, seems to have escaped both you and JWR.”

The clause definitely is necessary. There have been many word game posts to confuse this issue.

This obvious point is obvious NOW that Rob and I have drilled it home.

This obvious point is obvious NOW that Rob and I have drilled it home.

I of course agree with your point, John. However, I do not want any newcomers to get the idea that it was only the two of us doing the hard work that brought about The Retirement Risk Evaluator (see tab to left) and the changes even in what the Goons say about SWRs. This was very much a community effort. There were hundreds of fine people participating. There are several articles up at the site that include comments filed by many of those fine contributors (there are links in the three recent blog entries on the SWR matter).

Does Raddr not deserve credit for helping us learn the truth about SWRs? Does PeteyPerson not deserve credit? Does Wanderer not deserve credit? Does JohnDCraig not deserve credit? Does Microlepsis not deserve credit? Does FoolMeOnce not deserve credit? Does BenSolar not deserve credit? The list goes on and on and on.

People who have made such fine contributions should not be required to give up their personal integrity and post dishonestly to gain “permission” from thugs like Lindauer and Greaney to post at our boards. These are the people who built our boards. The thousands of people who have made positive and constructive contributions to our board discussions are friends of mine. I am not going to sell them out by posting dishonestly about them or about the topics they have addressed in their posts. Slavery was outlawed in the states a good number of years back and it is a form of slavery to compel someone to post dishonestly about a number that people use to plan their retirements or about the posts that a friend has put to a discussion board.

I don’t think that we should even need to say these sorts of things. The published rules of every site protect those posting honestly and constructively from the sorts of thugs who have destroyed so many Retire Early/Indexing boards in recent years. I believe that the answer is for all of those who want to see the ban on honest posting lifted to appeal both to the site owners and to the big names who post on these boards.

John Bogle permits his name to be used to promote the Bogleheads board. That is shameful behavior. I would not in a million years permit my name to be used to promote a board that has banned honest posting on a number that people use to plan their retirements. There are many people in the Vanguard Diehards community who have the greatest respect for John (I am certainly one of them). I think it is perfectly right for us to ask him to come to our aid when thugs descend on our board and seek to destroy it. Yes, he’s helping us out by doing so. But guess what? He’s helping himself out too by doing so. We have all learned a lot from Bogle and when we are in return are able to teach him some important things that he does not now know, it seems to me that that’s just a great deal all the way around. That’s the power of community in action.

We all need to keep in mind that people are people. Bogle is a leader in the investing community. He does not want to get involved in all this sick and twisted stuff that the Lindauer and Greany “defenders” bring to the table. He acknowledges in his book that he understands that he can get things wrong. We should be trying to help him as well as to learn from him. That’s what community is all about. I am highly confident that Bogle cares deeply about the Vanguard Diehards community. So let’s do what helps him and us both! Let’s let the guy know that we need a hand with this. Let’s ask him to help himself by helping a community that has been formed to discuss and extend his ideas.

Goon are goons. There have always been Goons in the world mucking things up for the people who are seeking to do good. The way to deal with them is to deal with them, not to sit around and hope that by some magical process they will go away and leave us all alone. Certainly not by agreeing to post dishonestly to win their “favor.” The heck with that! That plays right into their hands.

There are thousands of fine people who post to the Bogleheads board and the Vanguard Diehards board and the Motley Fool board and the Early Retirement Forum. Let’s get about the business of taking our boards back! Let’s do it today!

Rob said: “I am grateful to you for rewriting the comment so that it could be posted here.”

JWR said: “The clause definitely is necessary. There have been many word game posts to confuse this issue. This obvious point is obvious NOW that Rob and I have drilled it home.”

1. Rob: I am grateful for you posting the reply in it’s entirety. Thank you.

2. JWR: If it is only obvious due to work from you and Rob, well then, I thank you, too. But at least we ALL now do agree, here now, and in writing, that it IS OBVIOUS; the distinction between historical values that *could* have been obtained, using datamining techniques like Trinity @ ~4%, versus projections one may or may not then feel emboldened to make using various models.

That’s progress.

3. Rob: It’s your blog, you can do as you like, but after this fresh example of potential progress, for you to immediately follow it up by calling specific people ‘thugs’, ‘goons’, ‘twisted’, ‘dishonest’, ‘shameful’, and to invoke the image of actual slavery far more than negates any good done earlier. One has to wonder if progress is really what you want.

at least we ALL now do agree, here now, and in writing, that it IS OBVIOUS; the distinction between historical values that *could* have been obtained, using datamining techniques like Trinity @ ~4%, versus projections one may or may not then feel emboldened to make using various models. That’s progress.

Those words are indeed a most encouraging indication of progress, Drip Guy.

Your suggestion is that diplomacy on my part could help us get the Retire Early and Indexing boards back on the track that we all want to see them on. If I am reading you right re that, you can count on big heaps of cooperation from me.

Are you speaking only for yourself or are there others whose views are being represented in the words you put forward above?

After putting forward the post above, I took a look at the Goon Central board and saw that the following words have been posted by Drip Guy:

“Respectfully, I totally disagree, Schroeder! Many is the time Rob has decried the “errors in the ‘Old school’ studies,” and just within the last week or so JWR linked to claims made on his blog that ‘early researchers’ avoided use of statistics and analysis (for reasons not given), invalidating their work. The hysterical rec0rd is replete with six long years of Rob claiming there were ‘errors’ and even purposeful lying and obfuscation going on. Hence the supposed “Ban on H0nest P0sting” and the “Reign of Terror.”

“What will be interesting now is to see if he can pull it together well enough to move on with life, now that he finally has seen the distinction that eluded him for so long. ”

I think it would be fair to say that, for Drip Guy, diplomacy is a one-way street.

I stand by my earlier comments. I will continue to post honestly on what the historical data says re SWRs.

Everyone who has spent even a small amount of time on the internet knows about the Goon tactics that are employed by some. There are links in the three recent blog entries on SWRs to articles at this site in which over 100 community members express a desire that action be taken re the Goon tactics and that honest posting on the SWR topic be permitted again. That’s obviously just a tiny sample of what is in the Post Archives. You pretending that you don’t know what the problem is helps us not one tiny bit.

You post daily at Goon Central,. Drip Guy. There’s a link to that board in the Blogroll. Any community member who thinks that what we see when we look at that site is a positive does not possess the emotional maturity to own stocks or to advise others what they should do with their stock investments. That’s my sincere take re this matter.

Getting control of your emotions is a big part of what it takes to achieve long-term investing success, Drip Guy. When we see the sort of behavior that we have seen from those who post in “defense” of the Old School studies, we should all know that there are big, big problems with these “studies.” Studies that make people feel such anger and hate and rage are not science. They are rationalizations. The reason why we see the rage is that the rationalizations are in the process of unraveling and this is causing people who have invested money pursuant to these studies to feel great pain.

It is my job to help people work through that pain. I hold no grudges. I am open to helping anyone who is open to being helped. I’ll help you, I’ll help Greaney, I’ll help Lindauer. I cannot help you if all you do is emote. To get to first base, you need to be able to acknowledge that there is a problem that is obvious to any reasonable person who takes a look at what they see appear before their eyes when they click to the Goon Cental link.

That site should not exist. Greaney was once a great contributor to the best discussion-board community on the face of Planet Internet. He gave that up for what? So that he could “defend” a study which you, one of his biggest “supporters,” says is an exercise in data-mining? There is a huge disconnect here, Drip Guy. You need to have a little talk with John and try to gain a sense of what it is that he is seeking to accomplish with this behavior.

You too need to get back to basics and figure out what it is you are trying to accomplish. You understand perfectly well what Goon internet posting is. You need to ask yourself why you support it and why you contribute to it.

I do not support it. I love our topic and I love our community members. I do not oppose the Goons as people. I oppose them because of the damage they do to our boards. None of us should have to tolerate this ugliness. It demeans us to do so. I believe strongly that we need to bring it to a close. I urge that we get that accomplished by the close of business today.

I am confident that, if we do so, we will all get down to work early Monday morning feeling a whole big bunch better about ourselves, about investing, about our fellow community members, and about the future.

Todd Tresidder has written a super article about the evolution of our understanding of how safe withdrawal rates work at his Financial Mentor site. It is called Are Safe Withdrawal Rates Really Safe?
Juicy Excerpt #1: It is known as the “4% Rule”, and it is widely considered to be “the truth” in safe withdrawal rates for retirement. The problem is it’s not the truth and every day people risk a lifetime of retirement savings on it.
Juicy Excerpt #2: It is the single most…

Business Week ran an article in its recent Annual Retirement Guide issue arguing that the Old School safe-withdrawal-rate studies get the numbers all wrong -- they are too pessimistic! Holy moly!
Juicy Excerpt: One expert now questioning this conventional wisdom is Michael Kitces, 30, director of financial planning for Pinnacle Advisory Group in Columbia, Md. Kitces was frustrated that the 4% rule can result in overly conservative withdrawal rates during certain market conditions and that…

I explained in yesterday's blog entry that it has been four years since William Bernstein drew our attention to the grave flaws in most retirement planning tools. The tools have been proven dangerous to the aspiring retirees who make use of them. We need to get them fixed or taken off the market altogether.
How do we get from where we are today to where we need to be?
I noted yesterday that it is not one or two or three retirement planning tools that are flawed. It is most of them. There…

A recent thread on the Morningstar discussion board on "Investing During Retirement" provides a good sense of what we're up against in our effort to get the publishers of today's retirement planning tools to correct the grave flaws in them that we have uncovered in recent years.
The thread was started by a poster who goes by the screen-name "bob09245." Bon owns the "Bob's Financial Website" site and is a popular poster at the Morningstar boards.
I saw that Bob had provided a link at his…

You probably know about internet memes -- like these.
We're going to have a new one after the next crash -- The No-Data Retirement Study Meme.
Juicy Excerpts:
1) The claims in my retirement study are not supported by the data but --
It is what it is!
2) The claims in my retirement study are not supported by the data but --
It's only a rule of thumb!
3) The claims in my retirement study are not supported by the data but --
You are banned from further participation at…

A fellow going by the name "SWR Lover" has posted a comment to Tuesday's blog entry on the Bogleheads wiki statement on safe withdrawal rates (SWRs), saying that he is the author. We of course do not know this for certain to be so. I find it believable. The group that controls what goes into the Bogleheads wiki has strong connections with John Greaney and with the abusive posters who congregate at Goon Central to organize their work destroying Retire Early boards and Indexing boards. One of the…

A poster named "Nisiprius" recently advanced the following wonderful post to the Bogleheads Forum:
1995:
Sucker looking for certainty where there is no certainty: So, how much can I safely withdraw?
Guru: Well, right now things look great. This year you could certainly--
Sucker: No, no, no. Tell me more than "this year." I want to plan ahead. I want to know a nice, safe rate, with a good safety margin built on. One that will be sustainable into the future under varying market…

Yesterday's blog entry reported on an e-mail that I sent to academic researcher Wade Pfau on December 21, 2010. Wade was visiting family for the holidays at that time. So that series of e-mails came to an end. The topics discussed in it were picked up in subsequent e-mail discussions.
One separate discussion grew out of some matters brought up in the discussion thread referred to above. The focus of this discussion was a research paper that Wade prepared on safe withdrawal rates. Set forth…

Yesterday's blog entry reported on an e-mail sent to me by academic researcher Wade Pfau on February 22, 2011. On February 15, 2011, I received an e-mail from Wade on a different topic, his research on safe savings rates.
He said: "You and DRiP Guy realized immediately about my new paper what it took me a few days to come to grips with: though I was only trying to do an old-school SWR study, all that I ended up doing was showing in a different way what you had been saying all along: the…

A recent article from the Journal of Financial Planning, entitled "Post-Modern Portfolio Theory," argues that: "If we periodically scrap our entire world view and play the skeptic, challenging even our most basic assumptions, the result will be progress."
Perhaps. But challenging basic assumptions is a lot of work that in many circumstances is not likely to generate insights of great practical value. So I question whether revisiting fundamentals is always a good use of one's time.
When it…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on May 17, 2011. Wade responded the next day.
He said: "It seems that the goons let the post by without too much complaint. Actually, this issue shouldn't really even be all that controversial. It's just common sense that the probabilities from the Trinity study shouldn't be interpreted as forward-looking probabilities for new retirees." My response, sent the same day, is set forth…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The Trinity study should never have passed peer review. ”
Who says it was ever peer reviewed? If your answer is anything more specific than “everyone knows it was peer reviewed”, I’ll be utterly astonished.
Anyway, they were too conservative. The actual father of the 4% SWR, Bill Bengen, now says the SWR is…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Isn’t it fraud to say 4% won’t work? After all, you have admitted that predictions fail.
No predictions are made in the calculation of the safe withdrawal rate. The return scenarios that have applied in the historical record are considered and the withdrawal rate that barely works in the event that the worst-case return scenario happens to pop up starting from…

I ain't no Numbers Guy.
It's important that you know that about me because most of my views on investing have been influenced by what the Financial Freedom Community learned about what the historical stock-return data really says during its Great Safe Withdrawal Rate Debate of recent years. I lack numbers skills, and yet I rely on a data-based construct (the safe withdrawal rate is determined through analysis of the historical stock-return data) to form my views on investing. That makes…

Set forth below is the text of a comment that I recently put to the Goon Central board:
it's an opinion, not the law of gravity
Then why the death threats?
Why the defamation?
Why the board bannings?
Why the threats to get academic researchers fired from their jobs?
The full truth here is that the idea of the Buy-and-Holders to root their investment strategies in academic research took investment advice beyond the level of just opinion. Research-based strategies are NOT pure…

My good friend Wade Pfau's conscience must be bothering him. He has recently worked up the courage to begin posting honestly again on at least some critically important investment-related topics.
It gets better.
Motley Fool, the site at which I posted my famous post of May 13, 2002, pointing out the errors in the Old School safe-withdrawal-rate studies (SWRs) and which for years now has prohibited honest posting on SWRs (after John Greaney, the author of one of the discredited retirements…

Our old friend Ed Easterling has published a new book that takes on "the mostly silly [Old School] research on safe withdrawal rates," according to John Mauldin, who posted an excerpt from the book at his site.
Ed participated in "A Special Afternoon with Ed Easterling" that was held at the Safe Withdrawal Rate Research Group a number of years back. He was kind and helpful to both John Walter Russell and me. I think it is wonderful that he has written a book that will help get the word out…

Schroeder posted a comment to yesterday's blog entry that I believe merits a blog entry of its own in response. His comment came in response to my observation that the Bogleheads wiki statement on safe withdrawal rates (SWRs) contains a link to an Old School SWR calculator but not to the only New School SWR calculator now available on the internet. Here is what he said:
"Actually, there are several links to Old School SWR studies. They have been authored by financial planning professionals…

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
There has never been a 30 year period in which a 4% withdrawal rate has not worked. To focus on this issue, however, is wrong if we are trying to determine the primary reason retirement plans fail. The primary cause is lack of sufficient savings. Given that this is your biggest mistake, it is not surprising that you attempt to avoid this topic and look to…

Yesterday's blog entry reported on an e-mail that I sent to Academic Research Wade Pfau on March 3, 2011. Wade responded later the same day.
He said that the Returns Sequence Reality Checker looked fine.
He provided the following link:
http://www.interest.co.nz/kiwisaver/amanda-morralls-five-fold-friday-felix-salmon-regular-savings-toxic-credit-card-debt-quake-gift-dedu
The link makes reference to the "New School on safe withdrawal rates." Wade observed that: "Maybe your "New…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on December 2, 2011. Wade responded the next day.
He thanked me for my encouraging words and said: "The idea about PE10 going up being different than P/E10 going down does make sense."
Wade told me about a book titled "How to Profit From Formula Plans in the Stock Market," which was published in 1961. He said that he downloaded it at a time when a free download was available but that there was no…

Yesterday's blog entry set forth the text of an e-mail that I sent to academic researcher Wade Pfau on December 18, 2010. Wade responded later the same day.
He said that he agreed with my comment re the Business Week article that safe withdrawal rates can rise a good bit higher than 4 percent as well as drop a good bit below 4 percent. However, he argued that the SWR was likely to remain low for some time and thus maintained that "perhaps it is not a major oversight on the author's…

We enter Year Five of The Great Safe Withdrawal Rate Debate at 10:40 AM (Eastern Time) on Saturday. Here are three topics that I hope we will see explored in more depth during the next 12 months of our community discussions:
1) We know that middle-class participation in the stock market increases in Bull Markets and diminishes in Bear Markets. Thus, many middle-class investors never see in real life the juicy returns promised on paper to long-term buy-and-hold investors. To what extent can…

The Bogleheads wiki contains the following statement on safe withdrawal rates (SWRs) under the heading "Controversy":
"Unfortunately, the term 'Safe Withdrawal Rate' is necessarily an ambiguous term. This is because initial methods utilized historical data to statically determine what would have been safe given the actual results that past portfolios would have generated with the variables given. The next logical step, of course, was to use that information to predict future SWRs. Either use…

That's a phrase that appeared in a post to the Early Retirement Forum put up by a poster named "Mikey." (He now uses the screen-name "HaHa").
I thought that was a good way of pointing out how lame the arguments are that are used by defenders of retirement planning tools based on the findings of conventional-methodology safe withdrawal rate studies. Here is a list of ten of the arguments most frequently advanced by defenders of today's highly misleading and highly dangerous retirement…

Yesterday's blog entry reported on an e-mail that Academic Researcher Wade Pfau sent to me on May 2, 2011. My response, sent the same day, is set forth below.
Wade:
Thanks much for the link. It's no problem not to mention the article for a little bit of time. That's trivial.
The Safe Saving Rate concept can effectively COMPLIMENT the safe withdrawal rate concept, but it cannot replace it. What do you do when someone who has never followed the Safe Saving Rate concept notices that…

Drip Guy made a good point in a post he put to the Goon Central board a few weeks ago. Ataloss argued that the reason why I say that the Old School safe-withdrawal-rate (SWR) studies are analytically invalid is that I don't approve of relying on historical stock-return data to determine the SWR. Drip Guy quite properly responded that: "He wants to enlist 'historical data' to his own cause, so the inference is not that looking at history is innately bad in Hocoworld, but instead that prior…

Wade Pfau, associate professor of economics at the National Graduate Institute for Economic Studies, has published additional New School safe withdrawal rate research. The new study is titled Withdrawal Rates, Saving Rates and Valuation-Based Asset Allocation.
Juicy Excerpt: While most everyone would agree that valuations matter, the question remains as to whether clients with a long-term outlook (such as those planning for retirement) can hope to act successfully on information about…

Scott Burns puts forward tantalizing hints but doesn't dare to tell the full story.
William Bernstein took a chance by stating it pretty darn clearly one time and is not inclined to take a bigger one by stating it pretty darn clearly a second time.
John Bogle says enough to permit those who want to know the realities figure them out for themselves, but holds back enough to permit those who do not to remain in the temporary comfort of the darkness.
Jonathan Clements knows enough to see…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
It matters when it comes. If it takes 60 years and stocks only use 50% of their value there is no way you will ever catch up due to lose compounding.
145 backwards looking years are irrelevant. The next 40 years is what matters for the current generation.
The basic point that you are making here is legitimate, Laugh.
It obviously is true that what you care…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on January 1, 2012. I sent a follow-up e-mail later the same day. The text is set forth below.
Wade:
I've now had a chance to look at the paper.
I am certainly glad to see his positive comments re your work. He is advancing the ball by pointing people to a new way of thinking about retirement planning.
I do not think he goes nearly far enough in warning people of the dangers of the Old…

Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Vanguard publishes article on 4% retirement rule. What ban?
http://vanguardblog.com/2014/11/07/the-4-spending-rule-20-years-later/
Where’s the discussion of the effect of the valuation level that applies on the day the retirement begins? That’s the error that caused the problem. She doesn’t even discuss that issue.
She says that the problem is that we are in a low-return…

Here are ten angles that we might pursue in our efforts to get publicity for the "Save the Retirements!" initiative:
1) The Consumer Protection Angle: Think of what would happen to the chief executive officer of a company who made safety claims that he knew to be false for a trampoline or for a diving board. He would face serious financial liabilities or possibly even jail time, right? Should the rules be so different for those who knowingly or negligently put forward false claims about the…

Set forth below is the text of an e-mail that I recently received from Bjorn Amundson, a Certified Financial Planner, followed by my response:
Rob:
Thanks so much for all the work you do and your great calculators on your site!
I stumbled onto Shiller's study probably 2 years ago. I was instantly struck with the huge implications it had for my work as a financial planner. Even better, I found out that someone had already gone and done all the legwork I imagined doing and creating…

I am the person who discovered the error in the Old School safe-withdrawal-rate studies. The error is that the studies do not contain an adjustment for the valuation level that applies on the day the retirement begins. Yale Economics Professor Robert Shiller published research in 1981 showing that valuations affect long-term returns. The error in the Old School SWR studies is likely to cause millions of failed retirements in days to come, in the event that stocks perform in the future anything…

So said "imfelbi" in a post to the Motley Fool board in the very earliest days of The Great Safe Withdrawal Rate Debate. One of our Numbers Guys had done a sensitivity study showing that the results of the conventional-methodology studies are highly unreliable. Imfelbi argued that: "I would rather work a few more years than cut it so close."
Today, imfelbi has another choice. Today, we know how to calculate safe withdrawal rates accurately. That's part of the message that we want to get out…

"Highly misleading."
That's the phrase that William Bernstein uses in his book The Four Pillars of Investing to describe analyses of the historical stock-return data that fail to take the effect of valuations into account.
The book was published in early 2002. It is now early 2006.
Go to a search engine, enter the term "retirement planning tools" to find studies and calculators that can advise you as to how much you can plan to safely withdrawal from your stock portfolio after you…

Yesterday's blog entry reported on an e-mail that Academic Researcher Wade Pfau sent me on March 4, 2011. I next received an e-mail from Wade on March 10, 2011.
Wade said that he had now done research on how Valuation-Informed Indexing worked in Japan and that it showed that "Valuation-Informed Indexing worked fine in Japan as well." He commented: "This was the big test, as valuations took a wild ride there" (Wade explained that the P/E10 level rose to nearly 100 by the start of 1990. He…

Yesterday's blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 7, 2012. I sent a follow-up e-mail one hour later. The text is set forth below.
Wade:
I thought of a way to reduce the long response I sent a few minutes ago to something much shorter. So I thought I would pass that along. Then I promise to shut up.
You sent an e-mail to the Trinity authors asking them to correct their study.
Why?
Rob
Wade responded the same day. He said:…

This is another complaint about those dastardly Old School safe withdrawal rate studies. It might not seem to be such at first. It might seem that I have turned my attention elsewhere for a passing moment. But it is not so. Keep reading and you'll see. It ends up being about SWRs, just as most everything else does in the HocoMind.
There's an article at John Reed's site in which he complains about readers who complain about typos in his self-published books. I cannot quite go along with what…

The Economist magazine has endorsed the New School approach to safe withdrawal rate research pioneered by John Walter Russell and me at the Motley Fool board back in May 2002. The article, titled The Wrong Number, states: "a safe withdrawal rate is very dependent on the valuation of the stockmarket at the retirement date."
I discovered the analytical errors in the Old School research in the late 1990s, when I was putting together my Retire Early plan. I put forward the first internet post…

I recently sent an e-mail to Robert Powell, editor of Retirement Weekly, letting him know of our "Save the Retirements!" initiative. I explained that "the problem is the failure of most existing tools to include adjustments for changes in valuation levels for stocks," and suggested an article on the topic.
Powell has published at MarketWatch.com an article entitled "New Thinking on Retirement Withdrawals."
Juicy Excerpt: "Lucas says it's likely the stock and bond markets will return far…

There was a discussion about safe withdrawal rates in the comments section of one of my blog entries a few months ago that provoked a comment by me in which I presented an overview of where things stand today re this issue. I wanted to highlight those words in a post of their own.
The thread from which my words set forth below were taken is here.
Here are the words that I put forward in that thread:
Thanks much for posting both the excerpt and the link, Gonna Get Moderated. Those are…

The Wall Street Journal on March 1 published an article titled Say Goodbye to the 4% Rule for Retirement.
Juicy Excerpt: Conventional wisdom says you can take 4% from your savings the first year of retirement, and then that amount plus more to account for inflation each year, without running out of money for at least three decades....In recent years, the 4% rule has been thrown into doubt.
Set forth below is the text of an e-mail that I sent to Kelly Greene, the author of the article.…

I recently wrote a Guest Blog Entry for the Weakonomics blog entitled Today's Retirement Planning Advice Is a Sick Joke.
Juicy Excerpt: The SWR studies were quickly corrected once the analytical errors in them became public knowledge. Apologies were made to the millions who used the incorrect numbers in the crafting of their retirement plans. New and more accurate studies were developed and marketed heavily so that middle-class investors could learn the realities of retirement planning for…

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Yes, I get that you are now 100% fixated on punishing me, rather than pursuing your own goals. If Wade’s paper gets written up in the New York Times, he gets all the glory and rewards. The first step is getting recognized experts like Bengen to acknowledge that he was the first. And that step is checked off. Of course, Wade could wave his hands and say “Shucks no, all this glory belongs to Rob Bennett. He’s the real brains behind any CAPE-based timing strategy.” Yes, that’s the ticket. That’s what will happen. Or you could take two minutes right now to set Bengen straight. Nope, you said that’s not an option. Anytime that anyone writes honestly about what the last 36 years of peer-reviewed research teaches us all about how stock investing works, it benefits each and every one of us who is trying to do the same. There is no limit on the credit that can be handed out. Millions of investors need access to accurate information. Thousands of investment advisers want to give it to them. The thing that is standing in their way is a Wall of Ignorance. People cannot believe the realities — that we now know of a way to invest in stocks that is far less risky and that allows people to retire far earlier in life — because they just sound too good to be true. Anyone who does anything to knock down that wall is helping all of us in a big way. Say that Wade does as you say. I am not saying that I think he would — I do not. But just say for purposes of discussion that he did. That would be an absolute boon for me. If the study that Wade and I prepared gets publicized — regardless of who gets the credit for it — it instantly becomes easier to tell the truth about stock investing at hundreds of different sites. So all of my stuff — I’ve developed a lot of it over the years — gets out. How does that hurt me? You always talk as if the key to getting credit is being smarter than other people. That’s not the reality here. Most Buy-and-Holders possess more than enough […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Uh oh, Rob. Bill Bengen points out the research and data that says you are wrong and that VII is a failure: “I have not studied in great detail the correlation between Shiller CAPE and withdrawal rate. However, Michael Kitces, a celebrated financial planner who has also done some important research in the area of withdrawal rates, produced an interesting chart some years ago. It showed a strong negative correlation between CAPE and each year’s safe withdrawal rates. So, I am not surprised at the conclusion that Wade reached, although I believe he may have been the first to quantify the “boost” to SAFEMAX by using a timing strategy. However, for those who wait for a low enough CAPE to invest fully in stocks, it has been a frustrating 25 years, as CAPE has been below its average of about 16 only about 25% of the time during that span (if that much). Today, of course, CAPE stands at more than twice its long-term average. It will be interesting to see if it does indeed “mean revert”, and even drop below its long term average. The only time that has happened in the last 25 years was for a few weeks in 2009. ” That last paragraph is power-packed stuff, Anonymous. I am grateful to you for sharing it with us. The claim that the last 25 years have been “frustrating” for Valuation-Informed Indexers is true only from the perspective of a Buy-and-Holder. Yes, if we have missed out on gains, then it could be viewed as frustrating. But the entire question in dispute is the question he puts on the table two sentences later when he questions whether prices will eventually mean revert or even drop below their long-term average. If that happens, the math shows that the Valuation-Informed Indexers will be far, far ahead of the Buy-and-Holders, too far ahead for the Buy-and-Holders to entertain any realistic expectations of ever catching up. Do I believe that prices are going to mean revert? 100 percent. I have never been more sure of anything in my life. Could I be wrong? 100 percent. I am one of those darn humans. We get them wrong all the time. All of us do. That includes me. We should […]

I’ve posted Entry #376 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called How Many Bull/Bear Cycles Are Required to Prove That Valuations Matter? Juicy Excerpt: I sometimes make the claim that 100 percent of the evidence available to us today supports Shiller’s view of how stock investing works and 0 percent supports Fama’s view. I of course understand that the statement strikes most Buy-and-Holders as extreme and absurd. But I advance the claim sincerely. It’s that hill-and-valley graphic showing how valuations play out in the long term that persuades me that the case is so strong. The hill-and-valley graphic applies for the entire history of the stock market. And it is logically incompatible with a belief in Buy-and-Hold. A visitor to my website asked me the other day how many times the hill-and-valley pattern has played out. The answer is four times. We came to the end of one bull/bear cycle in the early years of the 20th Century. We came to the end of a second at the onset of the Great Depression. The third ended with the stagflation of the 1970s. And we are presumably nearing the end of the fourth bull/bear cycle in our nation’s history today. Four completions of the cycle was not enough evidence to make the case for my friend. He asked me to get back to him when I can say that the same basic cycle has played out not four times but thirty times. Related PostsValuation-Informed Indexing #270: A Critic of Valuation-Informed Indexing Offers a Concise Case for Why Buy-and-Hold Is SuperiorValuation-Informed Indexing #269: Eight Questions That Should Be Keeping Buy-and-Holders Up at NightValuation-Informed Indexing #260 : Shiller’s Ideas Should Be Treated as Mainstream IdeasValuation-Informed Indexing #267: Take Valuations Seriously and You Will Discover Things That You Were Not Initially Even Seeking to DiscoverValuation-Informed Indexing #258: It Is Critical to Distinguish Returns-Sequence Risk from Valuations Risk When Calculating Safe Withdrawal RatesValuation-Informed Indexing #259: Return Predictions Are Implicit in All Investing Advice

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Hi Rob. Come join us. Love, Robert, Wade, Bill and Michael We’ll all be working together in the days following the next price crash, Anonymous. The only difference is that there will be more human misery if we wait. I vote for us all pulling together today. But you know what? I only get one vote. Others get to decide what others do. So we will have to wait a bit to see how things play out. I naturally wish you all the best that this life has to offer a person. Rob Related Posts “We Will All Be in a Better Place When I Can Go to Any Discussion Board or Blog on the Internet and Post With 100 Percent Honesty and Not Have Any Concern Whatsoever That Intimidation Tactics Will Be Directed At Me. We All Do Our Best Work When We Feel Free to Follow Our Ideas Where They Lead Us As We Further Develop Them. I Want That for Everyone.”“I Have Raised the Possibility of an Amnesty for People Who Have Continued to Promote Buy-and-Hold Because They Once Truly Believed in it and Who Are Suffering Cognitive Dissonance re the Last 34 Years of Research Because It Is Just Too Hard for Them to Accept That They Got Something Wrong. But I Can’t Adopt an Amnesty By Myself. We Have to Get Congress Involved. We Need to Have a National Debate.”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”“If I Had the Power to Release You All of Your Prison Terms and Your Civil-Suit Liabilities and Your Various Embarrassments, I Would Do It In Two Seconds in Exchange for Your Willingness to Permit the National Debate That Thousands of Our Fellow Community Members Have Evidenced a Desire to See Proceed.”“Shiller Showed Us That It Is Primarily INVESTOR EMOTION That Determines Stock Prices, Not Economic Developments. So We All Need to Make a Switch to Talking Primarily About Investor […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: http://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator#comments Bengen is asked about and comments about Wade, Shiller, Michael Kitces, FIRECalc, CAPE. There’s even a link to one of Wade’s papers (sadly, not the one you wrote.) This is an active comment thread, so there’s no excuse for you not jumping in. But you don’t. How can you just sit on the sidelines? You say you have the most important job in the world. This is right in your freakin wheelhouse. If you stay silent now, then obviously nothing will ever rouse you from your hibernation. I’m grateful for the link, Anonymous. I have commented at hundreds of places. The problem is certainly not that I have not commented enough. We have a problem as a society. Shiller provided us the last piece of the stock investing puzzle in 1981. Had he published his “revolutionary” (his word) research findings in 1961, there never would have been any Buy-and-Hold. But it didn’t happen that way. By the time Shiller showed that valuations affect long-term returns, we already had an entire industry built around Buy-and-Hold. All of the powerful and wealthy people who were making their living promoting Buy-and-Hold did not want their clients and readers and friends to realize that they had made a mistake. So they kept quiet about the far-reaching implications of what Shiller had done. They praised him, they patted him on the head, they patronized him, down the road a piece they even awarded him a Nobel prize. But they didn’t change any of their strategic recommendations to reflect his research findings. And, as time passed, it became harder and harder for them to acknowledge their mistake and thereby bring the cover-up to an end. It’s now been 36 years. It’s now not just hard to admit the mistake, as it would have been in 1981. It’s now very, very, very, very hard. I did not cause any of this. I came along in 2002, when I saw that Greaney got the numbers wrong in his retirement study and told my friends at the Motley Fool’s Retire Early board. Hundreds of them saw right away how important that post was. They said that I had started the most important discussion ever held in that board’s history. Greaney threatened to kill family […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. …The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts” And don’t you think it’s a wee bit presumptuous to claim you know the inner working of the minds of thousands of people you’ve never met, many of whom you agree are far more intelligent and experienced than you are? I’m intelligent enough to see that there is no valuation adjustment in the retirement study posted at Greaney’s site, Anonymous. And I am intelligent enough to know that Shiller’s research showing that valuations affect long-term returns must be legitimate research or else he would mot have been awarded a Nobel prize for it. I am intelligent enough to know that there is no place for death threats in discussions of stock investing. And that there is no place for demands for unjustified board bannings. And that there is no place for thousands of acts of defamation. And that there is no place for threats to get an academic researcher fired from his job. If you have a better explanation for the events that we have seen transpire over the past 15 years, I would be happy to hear it. Neither you nor anyone else has even tried to put forward a better explanation. So, no, I don’t think it’s presumptuous at all. These events demand an explanation. And there is an explanation available in the psychological literature — cognitive dissonance. So that’s the one that I am going with until I hear something better. You don’t have to accept my explanation if you don’t care to. You asked me a question and I gave you an honest response. My explanation is 100 percent sincere. I am as intelligent as I am, no more and no less. And that’s what I have come up with at this point in the proceedings. I look for new insights every day. So perhaps down the road a bit I will be able to add some detail to it. My best wishes. Rob Related Posts“At the Very Bare Minimum, We Need to Make It a Practice to Tell Both Sides of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “Stocks are today priced at two times fair value.” To be clear, this is a fact Wall Street is not aware of – otherwise they would immediately dump stocks. Is that fair to say? You are making a great point here, Anonymous. If you would reflect on this point a bit, the entire matter would click for you. Just about everybody on Wall Street is aware intellectually of what the P/E10 level is today. You see it mentioned all the time in articles. These people are obviously not dumb. So on an intellectual level, they know what they need to know. But they have not emotionally taken in the knowledge that they possess so that they can make productive use of it. They rationalize away this knowledge that they possess. They tell themselves “oh, nobody knows when the crash is coming and I cannot afford to miss out on gains in the meantime” or whatever. The knowledge that they possess sits in their brains but they have not integrated it with their other thoughts on all of the various strategic questions and so it is as if the knowledge did not exist. It is passive knowledge. It is not being put to productive use. It helps to remember what happened in the famous psychology experiment from the 1950s, the Asch experiment. People were put in a room and asked to identify which of two lines — a 12-inch line and an 18-inch line — were longer. Their brains possessed all the knowledge needed to supply the correct answer. It was obvious to them that the 18-inch line was longer. But the four people who were plants and who spoke before them all identified the 12-inch line as longer. This psychological reality neutralized the knowledge they possessed. Humans are social creatures. Evolution put something within us that tells us “don’t go against the tribe no matter what your brain tells you.” So they told the person conducting the experiment that they “thought” the 12-inch line was the longer one. Their emotions cancelled out the product of their mental processes. All of these people on Wall Street “know” what it means to say that stocks are priced at two times fair value, Anonymous. But their emotions — their […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Rob, It’s the same old thing, people think the party will never end. until it does. I have a friend who retired with $1million cash, his advisor told him to put it in the market in 2008. Well after a 60% loss he sold I guess anyone would. After this his advisor suggested going back in with the rest to “make his money back stocks, are cheap”. Well after all the dust settled he was left with $150,000. He cant go back to work and now he lives on SSI and depression. I myself have only 10% allocated to stocks now. Until you live through this or know someone who has you dont get it, the goons don’t because they cant be wrong. What really bothers me is the “common knowledge” that markets ALWAYS comes back? Really? all advisors say this, It is in all the financial articles on the web. I know I can’t remember the dates, but 7, 15, 20 years to recover. in the past,I for one do not want to sit and wait in fear hoping the market will come back for the rest of my life. Thank you for working so hard to get the word out, some of us get it Rob. Am I trying to get the word out or am I trying to learn myself? I think that the bottom line here is that I am trying to learn myself. There’s a message that I push. But, when you boil it all down, that message is: “Not one of us knows as much as he thinks he does, so we should all be willing to hear the other fellow out and learn what we can from someone coming at things from a different perspective.” That’s a process that serves us well in our efforts to learn in all other fields of human endeavor and it seems to me, that given how important investing is, it makes sense for us to apply the same learning process there that works in every other other field of human endeavor. Thanks for stopping by, Max. Non-Dogmatic Rob Related Posts“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “It’s his abusiveness.” Really? Here are just a few of your quotes from those pesky Post Archives. “The “4 percent rule” has caused millions of busted retirements” “When you calculate the SWR accurately, you find that the withdrawal rate that is described in the Old School studied as “100 percent safe” has only a one in three chance of working out for those who retired at the top of the bubble. That means that there are going to be millions of busted retirements resulting from just this one error” “I think the Old School safe withdrawal rate studies caused millions of busted retirements by getting the numbers so wildly wrong.” “There are going to be millions of busted retirements resulting from the demonstrably false claims put forward in the Old School safe-withdrawal rates studies.” There’s no conflict between those statements and what I am saying here. The 4 percent rule will have caused millions of failed retirements in the days following the next crash (we obviously will not have any problem if it turns out that the last 36 years of peer-reviewed research is not legitimate research). Who is responsible for those millions of failed retirements? If it was all a mistake, no one was responsible. If it all was a mistake, then we all just have to be careful not to repeat the mistake. But that’s not the situation that we are dealing with. I pointed out the mistake in a post that I put to the Retire Early board at the Motley Fool site on the morning of May 13, 2002. Thousands of our fellow community members expressed excitement over the post, saying that they saw it as the most valuable post in the history of the board. Big-name experts like Rob Arnott endorsed the post, saying it checks out with what the last 36 years of peer-reviewed research says in every way and that it opens up the way to hundreds of big advances in our understanding of how stock investing works. A fellow with a Ph.D. in Economic saw how excited people were over the things they were learning in the debate that followed the post asked me if I would be willing to co-author research showing that this post led us […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: “I believe that Greaney has caused millions of failed retirements.” Exactly how? You’re still waffling on that. If it’s his 4% rule you should forget about nobody Greaney and focus on famous Bengen, who says 4.5%. If Greaney busted millions of retirements, Bengen certainly busted billions. If it’s Greaney’s abusiveness, how does his abuse bust the retirements of millions of people who never heard of either of you? It’s his abusiveness. Greaney didn’t come up with the 4 percent rule. He is not responsible for the intellectual mistake. I don’t think it would be fair to blame the people (like Bengen) who ARE responsible for the intellectual mistake for the millions of failed retirements. People made mistakes. That’s just one of those things. There is no evidence that the mistake was intentional, that the aim was to cause millions of failed retirements. So I don’t see that there is any blame to cast there. Greaney’s abusiveness IS intentional. That’s why I cast blame on him in a way that I do not cast blame on Bengen or lots of others. You suggest that Greaney’s abusiveness has not hurt the millions of people who have never heard of him or me. I disagree. I built the Retire Early board at Motley Fool into the #1 discussion board at that site with a purpose in mind — I wanted to teach millions of people how to achieve financial independence early in life. It was my intent to spread the word about what we learned about safe withdrawal rates to everyone on the planet. Greaney blocked that process from moving forward with his criminally abusive behavior. Wade Pfau and I intended to work together to get our grounds-breaking study showing that Valuation-Informed Indexing is superior to Buy-and-Hold featured on the front page of the New York Times. Greaney stopped that from happening by threatening to get Wade fired from his job if he continued doing honest work in this field. He destroyed millions of middle-class lives with that criminal act. Has anyone ever been more deserving of a long prison sentence? Valuation-Informed Indexing is a pure good. It’s all upside and zero downside. And millions of middle-class people who very much need access to honest and informed reports of […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: Just because you were able to browbeat Wade into emailing the Trinity guys doesn’t mean I’ll do your bidding too. Set up your own damn forum. But I promise I’ll read the historical transcript. Okay. Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“Part of the Job is to Describe the Pressures that Caused so Many Generally Good and Smart People Either to Participate in the Cover-Up or at the Minimum Tolerate It. I Post These Goon Conversation Blog Entries to Help People Come to a Full Understanding of What Happened.”“Wade Pfau Never Wrote Any Words of That Nature Until You Threatened to Send Defamatory E-Mails to His Employer. Words That Are Said As the Result of Intimidation Tactics Don’t Count. Wade Said What He Really Believes About Safe Withdrawal Rates and About Valuation-Informed Indexing and About Me in Hundreds of E-Mails That He Exchanged With Me, Many of Which I Have Reported on at My Site.”Rob Bennett to Wade Pfau: “It is 100 Percent Wrong That People Posting at Bogleheads Feel Intimdated re Posting My Name…. By Using My Name, You Help Others Get Over Their Feelings of Intimidation”“After the Crash, the Floodgates Open. People Will Give Up Their Feelings of Embarrassment and Shame and Become Determined to Get Things Back on the Right Track. At That Point the Owners of the Bogleheads Forum Are Not Going to Be Resisting My Efforts to Take Over. They Are Gong to Be Asking Me to Take Over. We Are Going to Be Friends.”Buy-and-Hold Goon to Rob: We Have Only Your Word That Wade Ever Said That, or Ever Even Mentioned VII By Name. He Certainly Says Nothing of the Kind Today. In Fact, To You, He Says Nothing At All.”

Set forth below is the text of a comment that I recently put to the discussion thread for another blog entry at this site: “I think Bengen is wrong. I think that I have a responsibility to say so.” And so you do. Here, behind his back. But you won’t express your math-free gut-feel opinion in a comment section where he might see it. How is that living up to your responsibility? No. I engaged in an e-mail conversation with Bengen a number of years back. I told him that I think he is wrong re safe withdrawal rates. Set up a debate at the Bogleheads Forum. We can have Bengen there. We can have me there. We can have Bogle there. We can have Shiller there. We can have Greaney there. We can have Linduaer there. We can have Pfau there. See how it goes. No death threats. No demands for unjustified board bannings. No thousands of acts of defamation. No threats to get academic researchers fired from their jobs. We’ll make history. Rob Related PostsGoon Poster to Rob: “You Have Stated What You Think Are Problems. People Have Responded As to How They Disagree. People Eventually Got Angry Because of Repetitive Comments Going in Circles.”“We Should Be Asking Bogle Where He Got That Number If He Did Not in Fact Pull It Out of His Backside. Since He’s Available at the Bogleheads Forum and Appears at the Annual Meeting, That’s the Perfect Place to Put Him on the Hot Seat.”Buy-and-Hold Goon to Rob: “I and Many Others Are Confident in Buy–Hold-and-Rebalance. You Seem to Be the Only One Confident in Valuation-Informed Indexing.”Goon Poster at Value Walk Site: “All One Needs to Do Is Read Your Posts and See That the Vast Majority of Your Posts Include Complaints About What You Think of Shiller, Bogle, Pfau and Others. You Want to Talk About Taking People Down, Down, Down. Just Read Your Own Posts.”“Most People Who Agree With Shiller Hold Back From Exploring All the Implications of His Ideas Publicly. That’s Why Valuation-Informed Indexing Has Only Won Over 20 Percent of the Population in 34 Years. I Want It to Win Over 100 Percent of the Population. So I Say Things in the Way in Which They Must Be Said for Us to Get to 100 Percent.”“It’s ALL a Guide. But You Buy-and-Hold Goons Don’t ACT Like It’s All a […]

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site: It makes perfect sense. You despise Greaney. You just won’t say that, so you blindly attack his work. Do you know how many Google hits there are out there for “rob bennett” “millions of busted retirements”? Lots. And the cause of all those busted retirements? The 4% rule. Now, magically, you have no problem with it. 4%, 4.5%, whatever, it’s all good, let’s just get along. Today you say “Greaney has destroyed millions of middle-class lives with his insanely abusive behavior.” Which is absurd, but it clearly shows your problem with him is personal. Until someone says it’s personal. Then the problem is back to the 4% rule. I don’t despise John as a person even a tiny bit. I had a lot of good times with the guy. I never would have had those times if he had not started that Retire Early board. When I was starting work on the book that became “Passion Saving,” I asked John to be my co-author. Why would I do that if I despised him? This claim makes no sense. And it’s not right to say that I blindly attack his work. I reviewed his retirement study when he published it as a report at the Soapbox.com site. I gave it a five-star review. I felt a little funny about doing that because I knew at the time (but had not come out publicly and said so) that he got the numbers wrong in his study. I rationalized what I did on grounds that his study was a significant advance on the retirement literature that was in place before he came on the scene. I still believe that to be the case. Peter Lynch was the manager of the Magellan fund. He was a pretty big deal. Lynch said that the safe withdrawal rate was 7 percent. Greaney said it was 4 percent. Greaney was a lot closer to the mark than Lynch was. Not bad for a guy whose only qualifications to write about the subject were that he (like me) had figured out how to get his words posted to an internet site. So I like the guy as a person and I admire his work. But, yes, you are right that I believe that Greaney […]